Workers comp coverage required in New Jersey
All employers with one or more employees must provide workers' compensation insurance. Verified 2026-05-09.
Who must carry workers comp in New Jersey?
New Jersey workers compensation coverage is required All employers with one or more employees must provide workers' compensation insurance.
The threshold language matters: states write the rule slightly differently. Some count any worker, some count only W-2 employees, some count owners separately, some have industry-specific exemptions (agriculture, domestic service, casual labor). For a New Jersey employer with a non-trivial workforce, the safest default is: assume coverage is required and confirm with the state department of insurance or a local agent.
How the threshold interacts with 1099s and subs
New Jersey uses a strict 'ABC test' to determine if a worker is an independent contractor or an employee. General contractors are liable for the workers' compensation benefits of employees of an uninsured subcontractor.
Penalty for going without
Penalties for non-compliance include fines up to $5,000 for the first 10 days and $5,000 for each additional 10-day period, stop-work orders, and potential criminal charges. The financial penalty is usually a fraction of the human cost: an injured employee at an uncovered employer can sue directly under tort law instead of being limited to the workers comp benefit, exposing the owner to lost-wage damages, pain and suffering, and punitive damages without the corporate veil.
Related reading
FAQs
Who has to carry workers comp in New Jersey?
All employers with one or more employees must provide workers' compensation insurance.
When does the requirement kick in for a new New Jersey employer?
The clock starts on the first day the first qualifying employee is on the books. New Jersey does not have a grace period for new employers, so a policy needs to be bound on or before the first hire date. Some agents can issue same-day binders for low-risk class codes.
What is the penalty for not having workers comp in New Jersey?
Penalties for non-compliance include fines up to $5,000 for the first 10 days and $5,000 for each additional 10-day period, stop-work orders, and potential criminal charges.
Do 1099 contractors trigger the coverage requirement in New Jersey?
New Jersey uses a strict 'ABC test' to determine if a worker is an independent contractor or an employee.
Are subcontractors counted toward the threshold in New Jersey?
General contractors are liable for the workers' compensation benefits of employees of an uninsured subcontractor.
What happens if I am audited and found non-compliant in New Jersey?
New Jersey typically issues a stop-work order, assesses back premium for the period of non-coverage, and adds penalties on top. Specifically: Penalties for non-compliance include fines up to $5,000 for the first 10 days and $5,000 for each additional 10-day period, stop-work orders, and potential criminal charges. Severe or repeat violations can lead to criminal charges and personal liability for the business owner, separate from the corporate veil.